By Emily Glazer, Theo Francis and Chip Cutter
Two of the biggest U.S. banks and other corporations said they
are pausing or reviewing their political action committee donations
in the wake of last week's riot at the Capitol.
JPMorgan Chase & Co. and Citigroup Inc. said they are
pausing all PAC donations to Republicans and Democrats in the
coming months. Other companies, including the Blue Cross Blue
Shield insurance group and Marriott International Inc., said they
would pause donations to Republican lawmakers who objected to
President-elect Joe Biden's Electoral College win after supporters
of President Trump stormed the Capitol on Wednesday.
The actions follow a week in which businesses and their chief
executives have sought ways to ensure a peaceful transition of
power, with some calling for Mr. Trump's removal from office by
invoking the 25th amendment or impeachment. Others say they are
holding back on such action as they await Mr. Biden's inauguration
on Jan. 20.
The announcements could reflect an acceleration of recent trends
among large companies to limit or better disclose political
JPMorgan, the largest bank in the country, made the decision to
pause political giving for the next six months because of the
growing political crisis following the violence at the Capitol
alongside health and economic crises, said Peter Scher, JPMorgan's
head of corporate responsibility, in an interview.
"The focus of business leaders, political leaders, civic leaders
right now should be on governing and getting help to those who
desperately need it most right now," said Mr. Scher, who is also
chairman of the bank's Mid-Atlantic region. "There will be plenty
of time for campaigning later."
JPMorgan's PAC raised about $900,000 for federal candidates in
the 2019-2020 cycle, according to data analyzed through Nov. 23 by
the Center for Responsive Politics.
Citigroup's PAC will pause all its political donations through
March 30, according to an internal memo reviewed by The Wall Street
Journal. "We want you to be assured that we will not support
candidates who do not respect the rule of law," according to the
memo, which was sent Sunday.
Citigroup's PAC raised about $740,000 for federal candidates in
the 2019-2020 cycle, according to the Center for Responsive
Politics. Bloomberg News earlier reported on Citigroup's decision
to halt its PAC donations.
The JPMorgan and Citigroup PACs both gave more money to federal
candidates who are Republicans compared to Democrats, according to
the Center for Responsive Politics.
While the PACs' donations are a fraction of overall political
giving, JPMorgan and Citigroup employees also donate directly to
politicians and other political groups that may not disclose their
donors. The Wall Street Journal reported last week that some CEOs,
both Republicans and Democrats, were considering withholding
political contributions from lawmakers seen as trying to impede a
peaceful transition of power.
JPMorgan's PAC contributed $2,000 since 2017 to a committee led
by Missouri Sen. Josh Hawley, according to data from the Center for
Responsive Politics. Citigroup told employees in the memo it gave
$1,000 in 2019 to Mr. Hawley's campaign. Mr. Hawley has come under
fire from members of his own party, as well as Democrats, for what
critics see as his role instigating Wednesday's Capitol riot.
JPMorgan began discussing potential changes to its PAC giving
several days ago, a person familiar with the discussions said. The
decision to pause all political donations gives the bank time to
think through future giving, the person said.
A spokeswoman for medical-device maker Boston Scientific Corp.
said it is temporarily suspending its PAC activity for an unknown
period of time given the recent violence and polarized political
environment and will review its approach to future contributions.
The company has given $3,000 to Mr. Hawley's campaign committee
The newsletter Popular Information earlier reported the Boston
Scientific announcement and that three companies -- health insurer
Blue Cross Blue Shield Association, Commerce Bancshares Inc. and
hotel giant Marriott -- would halt political spending to lawmakers
who impeded the transition following the violence at the
Marriott's PAC has given $1,000 to Mr. Hawley's campaign, as
well as another $1,000 to a PAC he heads. A Marriott spokeswoman
said the company would pause giving from its PAC to those who voted
against certification of the election. "We have taken the
destructive events at the Capitol to undermine a legitimate and
fair election into consideration," she said.
A spokeswoman for Commerce Bancshares said its employee-funded
PAC suspended donations for "officials who have impeded the
peaceful transfer of power." The spokeswoman added: "Commerce Bank
condemns violence in any form and believes the actions witnessed
this week are abhorrent, anti-democratic and entirely contrary to
supporting goodwill for Americans and businesses."
Commerce Bancshares has given $5,000 to Mr. Hawley's campaign
since 2017, according to Center for Responsive Politics data.
Blue Cross Blue Shield Association Chief Executive Kim Keck said
it is suspending contributions to Republican lawmakers who "voted
to undermine our democracy."
"While a contrast of ideas, ideological differences and
partisanship are all part of our politics, weakening our political
system and eroding public confidence in it must never be," Ms. Keck
said in a statement.
The association has given $500 to Mr. Hawley's campaign since
2017, while Anthem Inc., a Blue Cross Blue Shield licensee with
health plans in more than a dozen states, has given $5,000 to
committees supporting the Missouri senator, Center for Responsive
Politics data show.
CEOs and business groups have condemned the riots and taken
other steps in recent days. The National Association of
Manufacturers on Wednesday called on Vice President Mike Pence to
consider invoking the 25th amendment, which allows for a transfer
of power when a president is unable to fulfill his duties. Twitter
Inc. banned President Trump's personal account from its platform,
citing a risk of further incitement of violence, while the Canadian
e-commerce company Shopify Inc. took stores run by Mr. Trump's
business and campaign offline and Stripe Inc. will no longer
process payments for Mr. Trump's campaign website.
Some CEOs, though, said they didn't plan to adjust their
political funding for now. "I'm not thinking about that at this
point," said Paul Sarvadi, CEO of Insperity Inc., a publicly traded
provider of human-resources and other business services, who has
donated to Republicans. "I think it pays for companies to be more
deliberate, less reactive."
Companies face growing pressure from investors and shareholders
over political spending. Since 2004, 200 of the S&P 500
companies have faced shareholder proposals seeking to limit
political spending or to improve disclosure, according to the
Center for Political Responsibility, a nonpartisan group in
Washington that works with investors to push companies to limit or
better disclose political spending.
Nearly half of companies in the index fully disclose or prohibit
contributions to candidates, parties and political committees, up
from 183 in 2015, according to the group. Most of those prohibit at
least one kind of contribution altogether, often independent
expenditures or contributions to candidates and political
A key factor is the backlash -- from consumers, employees and
investors -- that companies can face for funding candidates who
later take stands conflicting with popular sentiment or the
company's own public positions, said Bruce Freed, the group's
president. He expects companies to come under increasing scrutiny
in coming weeks and months.
"All of their statements become hollow if their political money
is going to members who voted to overturn this election," Mr. Freed
said. "The risk of political giving has gone up exponentially."
Write to Emily Glazer at firstname.lastname@example.org, Theo Francis at
email@example.com and Chip Cutter at firstname.lastname@example.org
(END) Dow Jones Newswires
January 10, 2021 21:05 ET (02:05 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.